Half Year Results 2021/22
1 April 2021 to 30 September 2021

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Half Year Results 2021/22

08.11.2021

2

Strong momentum despite supply chain issues
Strong start into the year has continued through Q2, benefitting from the diversity of businessacross sectors and regions and leading to record sales and profitability in the first semester
Demand and investment confidence particularly evident in Drives and Renewable Energy businesses
Rollout of DC meter boosted Renewable Energy business: new electric vehicle charging infrastructure gets
established across Europe
Pace of electrification is driving the good performance of Automotive segment

Material shortages, such as packaging, plastics, resistors, transistors, and amplifiers

Biggest challenge for many sectors is semiconductors
Wafer manufacturing – geopolitical risks, long term capital investment
Processing/cutting/testing/packaging – Covid restrictions South East Asia

Challenges are reflected in our global bookings which improved for the 5th consecutive quarter
Half Year Results 2021/22

08.11.2021

4Global manufacturingUpturn remains constrained by supply chain
disruptions and input shortages

Manufacturing production and new orders
both rose for the 15th successive monthin September 2021
Efforts to raise production further werestymied by severe supply-chain andlogistic disruptions
The past 6 months have seen supplierlead times lengthen to the greatest
extent in the survey history

Half Year Results 2021/22

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Semiconductors shortages
Impact on LEM businesses is varied
Industry segment
Drives and Renewable Energy
Limited choice of suppliers

Automotive segment
Whole sector impacted – OEMs, Tier 1 suppliers,
subcontractors

Supplier costs passed through to customers
Battery Management is most affected
Large product portfolio gives choice and options forcustomers

Microcontrollers critical component

Market leadership, quality + reliability premium

Difficult to switch suppliers – up to 2 years validation
process

Long-term relationships, collaborative solutions withkey customers

Designed-in, highly complex

Motor control – some choice of suppliers

Weekly meetings
Transparency, allocation

Customers

Designed-in products

All in the same situation

Commitment to orders over longer time frame

All wanting to grow, but hampered by this bottleneck
Commitment to orders over longer time frame
Half Year Results 2021/22

08.11.2021

6

Supply chain prognosis
LEM reliability and agility to find solutions
Continue to trouble-shoot and find alternatives
Continue to collaborate with customers and suppliers for long-term solutions

Further develop semiconductor capabilities over the coming 3 years
Design, Packaging, Testing

Ultimate bottleneck for all players is wafer manufacturing capacity

Demand is strong across all our businesses
We invest into further production capacity

Sales growth hampered throughout 2022

Half Year Results 2021/22

08.11.2021

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AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Half Year Results 2021/22

08.11.2021

8

A leading company in electrical measurement
Core applications

MotorDrives

Segments

Automotive
Motor control

H1 2021/22 Sales
CHF mPower Storage, Generation,Conversion

Batterymanagement

EnergyMeasurement

Industry
Charging
systems

Drives & Welding

Renewable energies

Traction

High-Precision

Half Year Results 2021/22

08.11.2021

40.1

143.6

Δ CHF

+27.3%+27.5%Δ constant currency+25.4%+25.4%

9Global sales spread

GrowthChina and Europe
increased their share
22%

Balanced exposure
38%

Close to customers on
the ground in all keymarkets

9%

31%

Sales

HY 21/22

Q2 21/22

CHF m

vs 20/21

vs 20/21

China

69.9

+29.0%+27.9%

Europe57.2+33.9%+36.5%

North America

16.9+19.0%+23.2%

RoW

39.7+20.3%+26.4%

Total

183.7

+27.5%*+29.6%* +25.4% at constant currency rates

Half Year Results 2021/22

08.11.2021

10

Industrysegment

Industry segment
Sales performance
CHF mBusinesses

2021/222020/21

ChangeComments

Drives65.4

46.8+39.8%••

Growth in multiple industrial and consumer sectors
Manufacturing capacity investment in semiconductors

Renewable Energy

52.1

41.4+26.1%••

China solar driven by infrastructure
Europe boosted by DC meterTraction

21.4

20.8+3.1%•Rail traffic first signs of recovery

High precision

4.6

3.7+25.4%•Demand for test and measurement products picked up

Total Industry

143.6

112.6

+27.5%

Half Year Results 2021/22

08.11.2021

12

Industry segment
Regional markets

GrowthAll regions benefit fromreturn of investment
confidence andcustomer demand

19%
35%
9%

Europe recovered fromlowest point last year
and regained status aslargest market

37%Sales

HY 21/22

Q2 21/22

CHF m

vs 20/21

vs 20/21

China

50.3

+20.3%+23.9%

Europe52.5+34.4%+40.4%

North America

13.1+20.9%+32.7%

RoW

27.6+32.7%+39.6%

Total

143.6

+27.5%*+33.4%* +25.4% at constant currency rates

Half Year Results 2021/22

08.11.2021

13Industry next generation products
DrivesIN-200Traction

Renewables

HOB

LWSR

CDSR

Smart Grid

HTRS

ARH

Half Year Results 2021/22

08.11.2021

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Automotive segment
Sales performance
CHF mBusinesses

2021/222020/21

ChangeComments

Battery Management

20.7

18.9+9.5%••

Supply chain bottlenecks
Significant drop in US 12V demand

Motor Control

17.5

11.3+54.8%•Strong demand spurred by EV cars

Charging Systems

1.9

1.3+49.0%•Continued momentum for battery electric and hybridvehicles

Total Automotive

40.1

31.5+27.3%

Our products have been designed in for several EVs which entered production in 2020
Sales this half year would have been even stronger, except for the continued supply
chain issues
Bookings nearly tripled compared with H1 2020/21

Half Year Results 2021/22

08.11.2021

16

Automotive segment
Regional markets

China sales up due toconsumer demand for EVs andthe launch of several newvehicles
Europe grew, as manufacturers
produced more EVs to achieve
CO2 emissions targets

North America with positive
growth, but still transitioning togreen cars at a slower pace
RoW declined slightly by 1.0%
due to shortages ofsemiconductors and higher
sales base last year

GrowthSales

HY 21/22

Q2 21/22

CHF mvs 20/21

vs 20/2130%

49%

9%
12%

China

19.6+58.7%+38.8%

Europe4.7+28.4%+5.5%

North America

3.7+12.7%

+0.5%

RoW

12.0-1.0%

+2.9%

Total

40.1+27.3%*+17.7%* +25.4% at constant currency rates

Half Year Results 2021/22

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Automotive next generation products
Battery management

HSBBV

Motor control

HSTCharging systems

CDT Series

Half Year Results 2021/22

08.11.2021

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AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea BorlaOutlook

Frank Rehfeld

Half Year Results 2021/22

08.11.202119Performance at a glance

HY 2021/22
CHF m

HY 21/22

Q2 21/22

vs 20/21

vs 20/21

Orders received

300.2+121.8%+102.7%

Sales

183.7+27.5%*+29.6%

EBIT

42.1+48.6%+38.9%Net profit

35.2+50.4%+45.9%* +25.4% at constant currency rates

Global orders improved for the 5th consecutive quarter
Sales at constant exchange rates improved by 25.4%
EBIT and net profit improved mainly due to the increase in revenue

Half Year Results 2021/22

08.11.2021

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Gross margin
CHF m

160

HY50%

Q2Q22021/22 2020/21 2021/22 2020/21

14048%
120

HYIn CHF m

85.6

65.5

42.9

32.5

In % of sales

46.6%

45.5%

47.5%

46.5%

46%
10080

44%

60
42%

Gross margin increased by 110 basis pts:
Higher sales volumes

4040%
20

038%
17/18

18/19

Full year GM in % of sales

19/20

20/21

Ongoing efficiency programs
80% of sales produced in China and Bulgaria

21/22

Half year GM in % of sales

Half Year Results 2021/22

08.11.2021

21SG&A
CHF m

60

HY30%HYQ2

Q22021/22 2020/21 2021/22 2020/21

5040

In CHF m

28.425.314.4

12.1

In % of sales

15.4%

17.6%

16.0%

17.3%

20%

30

2010%

Costs increased in absolute terms to support
extra demand… but in relative terms fell to 15.4% of sales

1000%
17/18

18/19

Full year SG&A in % of sales

19/20

20/21

21/22

Half year SG&A in % of sales

Half Year Results 2021/22

08.11.2021

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R&D
CHF m

30

HY10%

HYQ2

Q2

2021/22 2020/21 2021/22 2020/21

258%

In CHF m

15.2

13.0

7.6

6.3

In % of sales

8.3%

9.0%

8.4%

9.0%

206%
154%102%

Investment continues to bear fruit withadditional new products launched successfully0%Long-term strategy ensures targeted newtechnologies and applications for customers

50
17/18

18/19

Full year R&D in % of sales

19/20

20/21

21/22

R&D increased in absolute terms by 17.3%

Half year R&D in % of sales

Half Year Results 2021/22

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Financial expense
HYHY

Q2

Q2

2021/222020/212021/222020/21

Exchange effect

(0.3)

0.1

(0.1)

(0.1)

Other financial expense & income

(0.0)

(0.1)

(0.1)

(0.0)

Total(0.4)

0.0(0.2)

(0.2)

CHF m

Limited foreign exchange impact

USD, EUR and JPY cash flows are hedged
Interest costs relate mainly to expenses on lease liabilities

Half Year Results 2021/22

08.11.2021

24

Income taxes
HY2021/22

HY
2020/21

Expected income tax rate

15.1

15.5

Expected withholding tax rate

1.7

1.6

Expected tax rate

16.9

17.1

Other differences

(1.2)

0.4

Effective tax rate

15.7

17.5

%

Effective tax rate lower due to favorable geographic profit mix and tax credits
from R&D center in France
LEM China benefits from the HNTE (High & New-Technology Enterprise) reduced
tax rate of 15%
Withholding taxes mainly on dividends paid from China to Switzerland

Half Year Results 2021/22

08.11.2021

25

Income statement
HYHY

Q2

Q2

CHF m

2021/222020/21

Change2021/222020/21

Sales

183.7

144.1

+27.5%

90.4

69.8

Gross margin %

46.6%

45.5%

+1.1%pt

47.5%

46.5%

Operating expenses(43.5)(37.2)+17.0%(22.1)(17.4)

EBIT

42.1

28.3

+48.6%

20.9

15.0

EBIT margin %

22.9%

19.7%

+3.3%pt

23.1%

21.6%

Net financial expenses

(0.4)

0.0

n/a(0.2)(0.2)

Income tax

(6.6)

(5.0)

+32.2%

(2.8)

(2.6)

Net profit

35.2

23.4

+50.4%

17.9

12.3

19.2%

16.2%

+2.9%pt

19.8%

17.6%

Net profit margin %Half Year Results 2021/22

08.11.2021

26

Balance sheet

CHF m

30.9.2021

31.3.2021

Net working capital

60.5

25.8

Fixed assets

119.4

122.6

Noncurrent liabilities(11.3)(14.9)Net operating assets

168.6

133.5

Net cash/(debt)(45.4)(1.6)

Equity

123.3

131.9

Equity ratio

44.9%49.9%

Days of sales outstanding

7274

Days of inventory outstanding

85108

Days of payables outstanding

3948

Equity ratio dropped to 45%
due to the dividend
payment in July 2021, but
improved by 5%pts
compared to 30 September
2020
Net debt increased to CHF
45.4m mainly due to thedividend financing (CHF47.9m) and the IP tax
payment (CHF 26.6m)

Half Year Results 2021/22

08.11.2021

27

Cash flow

CHF m

HY2021/22

HY
2020/21

Profit before taxes

41.7

28.4 Free cash flow:

Adjustment for non-cash items and taxes paid(21.9)(1.9)

Cash flow from changes in net working capital(8.0)• lower at CHF 5.1 million(12.0)(CHF 7.8 million)

Cash flow from operating activities

11.9

14.4

Cash flow from investing activities(6.8)

Free cash flow

5.1

Cash flow from financing activities(1.0)

Change in cash and cash equivalents

4.1• impacted by a nonrecurrent tax payment of
7.8
CHF 26.6 million
following the IP transfer(10.5)
completed in March 2020
(2.7)

Cash and cash equivalents at the end of the period

26.7

16.4

(6.6)

Half Year Results 2021/22

08.11.2021

28

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Half Year Results 2021/22

08.11.2021

29

Outlook – Financial Year 2021/22
Our businesses have demonstrated resilience incoming through the worst impacts of the pandemic
We continue to benefit from the fundamental drivers ofelectrification, renewable energy and mobility
Long term growth prospects give us great confidence

Short term we still face headwinds fromshortages and supply chain issues for components suchas semiconductors
and from the ramifications of ongoing trade disputes

For the full FY 2021/22, we expect sales in the range ofCHF 340 – 350 million (CHF 301.0 million for 2020/21),
with an EBIT margin above 20%

Half Year Results 2021/22

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Q&A

Half Year Results 2021/22

08.11.2021

31

Financial calendar and contact details
The financial year runs from 1 April to 31 March

For further information

4 February 2022

Third-quarter results 2021/22

Andrea Borla, CFO

24 May 2022

Year-end results 2021/22

Phone: +41 22 706 12 50

30 June 2022

Annual General Meeting FY 2021/22

E-mail: investor@lem.com

5 July 2022

Dividend ex-date

7 July 2022

Dividend payment date

Half Year Results 2021/22

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32

lifeenergy
motion